ONDO, the native token of a decentralized finance (DeFi) protocol that provides fixed yield loans backed by yield-generating crypto-assets, is witnessing a recovery following a significant price drop.
On August 5th, ONDO reached a low of $0.52, but in the past week, the token has recorded a 7% increase, with an additional surge of 4.3% in the last 24 hours.
This rebound is occurring amidst a rising interest from both traders and analysts, hinting at potential upward momentum for ONDO in the coming days.
ONDO’s Potential Rally Indicated by Falling Wedge Pattern
A well-known crypto analyst, Captain Faibik, has recently expressed optimism about ONDO, suggesting that the token might be gearing up for a significant rally by the end of Q4 2024.
In a recent post on X (formerly Twitter), Faibik shared a technical analysis of ONDO, highlighting a falling wedge pattern in the token’s price chart and advised,
“Consider accumulating ONDO and exercising patience; you will appreciate it later. Expect a new all-time high in Q4 2024.”
This forecast has generated increased interest in ONDO as traders speculate on its potential to surpass previous price highs.
The forthcoming weeks are crucial in determining whether ONDO will witness a breakout.
Evaluating the Fundamentals
Yet, relying solely on technical analysis might not provide a comprehensive view. It is essential to also analyze ONDO’s underlying fundamentals to ascertain if the market conditions truly support the bullish projections.
An important metric to monitor is whale activity, representing transactions involving $100,000 or more. According to data from IntoTheBlock, ONDO’s whale transactions have notably reduced in recent weeks.
After peaking at over 60 transactions in late August, the number has dwindled to just 12 transactions currently.
This decline indicates a drop in high-volume trades, which could signal decreased demand from major investors and potentially moderate expectations for an imminent rally.
Besides whale activity, Open Interest provides insights into market sentiment. Open Interest encompasses the total number of open contracts in Futures and Options markets, serving as a gauge of a trend’s strength.
As per Coinglass data, ONDO’s Open Interest has climbed by 4.69%, reaching $83.12 million at present.
This uptick suggests a growing interest in the token, potentially indicating that traders are positioning themselves for a potential price surge.
However, there is a contrasting view to this optimistic outlook. While Open Interest has risen, its volume has dropped by 17.91%, standing at $86.67 million currently.
This divergence indicates that even though more contracts are being opened, the contract volume has decreased, hinting at uncertainty or a lack of conviction among traders.
This disparity between Open Interest and volume may suggest conflicting signals in the market, leaving ONDO’s future price trajectory ambiguous.